Find your employer of record in Nepal

Employees in Nepal have to receive the following benefits:

• Annual leave.
• Public holidays.
• Sick leave.
• Maternity leave.
• Bereavement leave.
• Notice period.
• Probationary period.
• Social security benefits.

Foreign employees that wish to work in Nepal have to apply for a work permit and a valid visa.

So, this visa is issued by the Department of Immigration, but the employee has to get the Labor Permit and the Work Agreement from the concerned government bodies.

Thus, obtaining a work visa in Nepal involves going through various government agencies to obtain approvals, and also undertaking legal formalities in the respective institutions.

Once the application has been approved, the visa status changes from “tourist” to “non-tourist” and the individual may work in Nepal.

Concerning the validity of the work permit, it may be valid for 3 to 5 years, depending on the field. Lastly, the working visa will be valid for the same period as the work permit.

The standard VAT rate in Nepal is 13%. However, there are some goods and services that are exempt. So, with an Employer of record, you can enhance your opportunities in Nepal.

Termination Process

Both the employer and the employee may decide to terminate an employment contract. However, they have to comply with the notice period. Also, once the contract reaches its end date, the employment can be terminated.

Likewise, an employer may terminate an employee if it finds the employee’s conduct or performance unsatisfactory.

As you can see, contract termination can be hard to understand. For this reason, you can look for PEO services to receive assistance.

Notice Period

The notice period in Nepal varies as the following:

• 1 month of service: 1 days’ notice.
• 1 month to 1 year of service: 7 days’ notice.
• More than 1 year of service: 30 days’ notice.

Nonetheless, in the case of resignation by an employee, the notice period is 15 days. Also, in the case of termination due to incompetence, the notice is 7 days as an opportunity for clarification. Lastly, in the case of retrenchment, the notice should be of 30 days.

Severance Pay

Since the employer’s contribution for gratuity is 8.33% of the basic salary every month, employees will receive their severance pay if they are not under the Social Security Act, which will be of 30 days for each year of service.

Nonetheless, in the case of economic dismissal or retrenchment, the employee can receive the 30-day severance pay for each year. But, as long as the employee is not under the Social Security Act. Since understanding Nepal law for severance pay can be overwhelming, you need EOR services.

Probation Period

The probation period cannot exceed 6 months. So, with an Employer of record in Nepal, you can determine the most optimum probationary period for your employees. 

Paid Time Offs

Employees in Nepal can take an annual leave of 18 days in a year after 12 months of employment. This is because they get one day of leave for every 20 days of service.

Thus, if an employee wished to accumulate the leave, he or she can do it for up to 90 days.

Calculating the annual leave for an employee can be complex. For this reason, you can trust in an EOR to do this task.

Public Holidays

There are 13 national holidays throughout the year.

Vacation Holidays

There are 18 vacation holidays throughout the year.

Sick Days

Employees may take a sick leave of 12 days in Nepal in a year. Consequently, if the sick leave is unused, it can be accumulated for up to 45 days.

Handling sick leave can be overwhelming. So, if you need extra help, you can delegate it to an Employer of record in Nepal.